Campaign running to force banks to lower interest rates

One of the ongoing issues in relation to the property market is the disparity in interest rates that homeowners are paying.

Leaving aside the tracker versus variable/fixed argument, Irish homeowners are still paying far more than their European counterparts.

Around 300,000 families nationwide are on variable rates, which see them paying up to EUR4,000 extra a year on a EUR200,000 mortgage compared with the average in the Eurozone.

Recently a campaign was launched called One Big Switch aimed at closing this gap.

The consumer powerhouse are attempting to secure mortgage savings by hammering out better deals from lenders.

A recent survey from them found that mortgage repayments were forcing nearly half of all homeowners to cut out holidays and socialising, while a further 18% were forced to work overtime to meet their repayments.

Co-founder of One Big Switch Oliver Tattan said he is hopeful that their campaign can lead to savings.

He said: “We put that collective together and use people power, a big community, and go round to the different banks and say, \’Here\’s the cohort we have, can you step up and give us the best offer you can?\’

“We\’re in the depths of negotiations. Mostly what happens is we get an offer, sometimes the offer beats the market and sometimes significantly so.

“We\’re certainly seeing interest from the providers.”

One Big Switch is hopeful of putting an offer on the table within weeks from a bank prepared to take on thousands of customers\’ home loans.

The deal is better than what they\’re being offered now and the target is to get 10,000 householders on board.

If each one has an average mortgage of EUR270,000, that\’s EUR2.7billion worth of business to a bank prepared to cut interest rates.

Speaking about his firm\’s online survey of 7,000 homeowners, Mr Tattan said: “It found over 40% of Irish households have worked longer and taken fewer holidays to pay high mortgage costs.

“The respondents were asked to nominate what sacrifices they have made to help meet the high cost of mortgage repayments in Ireland. The results showed 18% worked extra hours, 25% took \’fewer\’ or \’no\’ holidays and 19% socialised with their friends and family less.

“The results of the survey yet again point to the growing social, as well as financial costs, of the relatively high price Irish consumers are paying for their mortgage.

“Recent Central Bank figures show the average interest rate for a new loan in Ireland is 3.38%, significantly higher than the European average of 2.02%.

“Over the life of a mortgage, this Irish interest rate gap could cost many consumers tens of thousand of euros.”

Mr Tattan said the research was a reminder of the real costs of high mortgage rates here.

He added: “It\’s not just pressure on the household budget, it\’s also pressure on the family unit because it means more time at work and less time to spend with family and friends.”